Afternoon Market Commentary
Once again the euro dominated trading this Monday, while Carillion’s liquidation announcement continued to send ripples of opportunistic cheer and joint venture-concern through the UK markets.
The euro picked up where it left off last Friday, hopeful about a German coalition and pleased by the hawkishness shown in the last set of ECB meeting minutes. Against the pound it climbed 0.3%, keeping sterling the wrong side of €1.125, while against the dollar is surged 0.6%, striking a fresh 3 year peak in the process. Interestingly it seems that the eurozone indices are becoming more accustomed to the currency’s romps; the DAX only fell 0.1%, with the CAC actually rising 0.2%.
It wasn’t only euro strength that led it to batter the greenback – the dollar is just struggling full-stop, with cable rising to yet another post-Brexit referendum high after climbing 0.4%. This, alongside the market’s Carillion (LON:CLLN) confusion, helped prevent the FTSE from matching last week’s record levels, with the index dipping 0.1%.
As for the Carillion crisis, the UK’s major winners and losers were largely dictated by their proximity to the collapsed company. Galliford Try (LON:GFRD) and Balfour Beatty (LON:BALF), both of whom announced they would take a financial hit from their associations with Carillion, fell 7% and 3% respectively; at the other end of the spectrum, Serco Group (LON:SRP) surged 6.5% as investors predicted that troubled public services firm would benefit from having one less rival vying for contracts.
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